White Stallion construction could begin in April

Randy Bird, chief operating officer for White Stallion Energy Center spoke at a Bay City Lion's Club luncheon Friday. Construction for the energy center can begin as early as April.

BAY CITY - White Stallion Energy Center plans to break ground as early as April.

The announcement was made Friday at the Bay City Lion's Club luncheon.

"We have weathered some storms these last couple of years, and the sun is shining in the end now for White Stallion," said Randy Bird, the company's chief operating officer.

The good news is gas prices projection for 2016 have helped attract a major investor in the project, he said.

"This investor will provide $200 million to $300 million to help with the project," he said.

Bird said they have a confidentiality agreement and cannot reveal the investor.

The energy center would produce enough electricity to supply 650,000 homes throughout South Texas.

Bird said the company has had several challenges, including natural gas prices, a mild winter, and low power prices.

As early as 2009 the price for gas in Texas was at $13 per cubic foot, he said.

"Natural gas prices have pretty much set the power market," he said. "At that price in the market our project stings.

"People have over drilled and over produced, which resulted in oversupply of natural gas," he said.

All of those things have affected the possibility for investors for power purchase contracts, he said.

"Investors have been paralyzed over uncertainty in Europe, the Middle East, health care and the EPA," he said.

Bird said the good news is that by 2016, the price for gas is expected decrease to $4 from $5 per cubic feet when they are scheduled to have the first unit in operation.

The air permit is the second storm they have weathered, he said.

In September 2010, White Stallion obtained an air quality permit from the Texas Commission on Environmental Quality.

Last year, a Travis County judge ruled the air permit be sent back to the TCEQ because of some site changes.

The permits authorize construction and operation of the 1,200-acre tract that will be on the east side of the Colorado River, about 10 miles south of Bay City.

Another challenge included the green gas regulation implemented in April by the Environmental Protection Agency, which requires all new coal-fired plants to limit emissions of carbon dioxide and other gases linked to global warming from new power plants.

White Stallion can be exempt from the limits as long as construction begins by April, he said.

"We are authorized 12 months to be in construction without having to comply with the green house rule," he said.

The company has 18 months, or until December 2013, to complete the construction, but as long as the construction begins by April, they will be grandfathered to comply with the green house rule.

"We pride ourselves in having state-of-the-art equipment that will meet the new standards of the EPA," he said.

Bird said the EPA approached them and said the company was right about the coal-fired plant having lower emissions than the existing mercury standards.

"We feel really good about that," he said.

Bird said another challenge that kept the project from continuing included the Lower Colorado River Authority.

Four years ago when White Stallion came to Matagorda County, they met with the LCRA for water needs.

Bird said the LCRA approached them about buying power from them.

"When we met with them they told us that they wanted to buy all the power from us and they would provide the water for us," he said.

Four years later, Bird said the LCRA did a 180-degree turnaround after they had no water to provide and customers were leaving them.

"Some local turf farmers are developing a water system for ground water and will produce the amount of water that we will use for construction and operation," he said.

White Stallion will need 31 acre feet of water for operation.

"We'll be getting ground water from the local turf farmers, enough to support our construction," he said.

The water the energy center will need has been reduced by 85 percent, he said.

The total investment for the energy center is about $3 billion and will bring 2,600 construction jobs during the construction phase and 200 to 250 permanent jobs.